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Petrojam saga deepens

Jamaican directors resign

BY ALPHEA SAUNDERS
Senior staff reporter
saundersa@jamaicaobserver.com

Tuesday, June 19, 2018

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The controversy engulfing Petrojam continued to deepen yesterday with news that the three Jamaican members on the board of the oil refinery have quit amidst a hailstorm of allegations which have rocked the company over the past several weeks.

Jamaica Observer sources confirmed that Chairman Perceval Badahoo-Singh, and fellow directors Richard Creary and Harold Malcom handed in resignation letters yesterday.

The development comes days after Science, Energy and Technology Minister Dr Andrew Wheatley summoned all three to a meeting, prompted by the preliminary findings of an investigation into several “grave and troubling matters at Petrojam which have dominated public discourse in recent weeks”, a release from Wheatley's ministry said last Friday.

The release said Wheatley would “use the powers afforded to his office and take decisive action to deal with all those matters currently affecting the State-owned entity”.

Also on the weekend, the Observer obtained an e-mail, dated June 4, written by one of the Venezuelan directors on the Petrojam board, Williams Martinez, to Badahoo-Singh, asking questions about an Observer Online report on June 1 that the board — which includes three Venezuelans — had refuted claims being made by the Opposition about corruption at Petrojam.

“I would like to express that I am really surprised by the content of the below article included in the Jamaica Observer, which made reference that the three Venezuelan directors added their voices to the three Jamaican directors to refute the PNP's claim of corruption. According to this, I would like to know more details about the purpose of this news, which involves the Venezuelan directors,” the e-mail said.

The article quoted from a release issued by the Petrojam board saying: “At all times the requisite approvals and review channels are utilised for every aspect of the company's business, including the award of contracts, the provision of donations, and the implementation of projects. Donations are made to entities as part of our corporate social responsibility and in an effort to contribute to national development.”

That release noted the directors' concerns about issues circulating regarding the level of integrity and professionalism governing the affairs of the refinery.

The Opposition has raised a number of concerns in recent weeks, alleging victimisation and nepotism at Petrojam. Questions have also arisen about expenditure on plane tickets for Badahoo-Singh for a London trip in February which the chairman did not make but for which he was reimbursed US$8,000 by the Government.

General manager for Petrojam Floyd Grindley told the Public Administration and Appropriations Committee (PAAC) of Parliament last week that Badahoo-Singh had recently returned the reimbursement to the Government.

But that did little to appease PAAC members who pressured him for details on the now former chairman's out-of-pocket purchase of the tickets, a purchase which would have gone against Government guidelines which stipulate that services such as these must be procured by the Government on behalf of public officers.

“This is a case where this purchase circumvented the established process by the Ministry of Finance, and that is the reason why there is a reimbursement from the gentleman to Petrojam,” St Catherine Southern Member of Parliament Fitz Jackson argued. But Grindley insisted that the company had acted according to policy.

Petrojam is jointly owned by the Petroleum Corporation of Jamaica (PCJ), which has 51 per cent, and PDV Caribe SA of Venezuela. In 2006, the Government of Jamaica entered into a joint venture arrangement with the Government of Venezuela through the PCJ and PDV Caribe — a wholly owned affiliate of Petroleos de Venezuela, SA (PDVSA), the Venezuelan oil corporation — for the expansion, joint cooperation, and management of the Kingston refinery.

The agreement was effected on August 14, 2006, resulting in the PCJ, on January 1, 2008, transferring 49 per cent of its share capital in Petrojam to PDV Caribe SA.

The PAAC is now awaiting more answers from the Petrojam team on a number of other issues including details of the contract arrangement with technical consultants Asha Corporation, which is being retained at $21 million per annum, and has so far been paid US$59,000, US$47,000 and US$55,000 for three contracts between May 2017 and April of this year,

The general manager and his team have also been asked to report on the US$445,000 in corporate donations which Petrojam disbursed in 2017/18 to various causes, and the $13.9 million annual retainer contract with a public relations and marketing firm.

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